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Chapter 4 Mobile Marketing Figure 4-8 Setting of Beacons in a mall Shop at AAA to get a free 50% off of Welcome all services to XXX gift Mall!! Figure 4-9 Setting of Beacons in a shop Picture credit: estimote.com (edited by author) 45 | P a g e

Chapter 4 Mobile Marketing Figure 4-10 How does beacon work? Customer: BACKSTAGE16: When Jane enters the shoe shop, she receives a 1. Beacon constantly emits UUID (Universally welcome message immediately (provided that the Unique Identifier) within a programmable Bluetooth of Jane’s smartphone is on). range (1m to 70m). 2. When Bluetooth is enabled on a customer’s device, their app or pass ‘sniffs’ for beacons close by. 3. If there is a match between the beacon’s UUID and one of the UUIDs stored in the app or Passbook pass, a relevant lock screen message appears on the device. 4. The customer can conveniently swipe the lock screen message and access the location relevant pass, and take real-world action. Pictures credit: estimote.com Figure 4-11 Beacons vs. Geofencing Beacon Geofencing Picture credit:gimbal.com 46 | P a g e

Chapter 4 Mobile Marketing Figure 4-12 How does Geofence works? Inside Geofence Receive notification Outside Geofence Does not receive notification Figure 4-13 Application of Geofencing Picture credit: propellant.media 47 | P a g e

Chapter 4 Mobile Marketing Figure 4-14 Game Corner Instruction: Suggest the best mobile marketing device for the following cases. Options: QR Code, NFC, Beacon, and Geofencing Cases 1. Sending a text message to invite consumers who are around 80 meters outside a department store to invite them the latest offers and encourage them to visit. 2. Sending a promotional message about fashion and clothing of a department store to customers who walk past the fashion and clothing section within 50 meters. 3. Diverting customers from an outdoor ad to an official web site for more promotional information. The targeted consumers are those using smartphones without NFC function. 4. Allowing customers to access at the gate for a movie efficiently. 5. A supermarket decides to adopt a new payment system, which allows customers to pay anywhere before leaving the store. 6. A skincare brand wants to store customer loyalty points into its specific mobile app installed on customers’ smart devices. 7. A department store wants to find out which specific entrance(s) do its customers enter and exit the store, and also where and when do they visit the sections (e.g. menswear, toys and games, supermarket, babies, womenswear, watch and jewellery, etc.) in the store. 8. A shopping mall wants to identify the date and time its opted-in members drop by the mall, and also their shopping routes and exit time. When members pass by a large performance stage on the 1st floor with, they will receive a message about the coming-up events in around 1 to 2 hours. If female members walk by the womenswear on the 2nd floor, they will receive a one-time coupon which lasts for three hours on the same shopping day. If members made any purchases, they could record their loyalty points easily through a detector next to the check-out counters provided in each store. 48 | P a g e

Chapter 4 Mobile Marketing 4.6. Mobile Application Mobile Application (Mobile App) is an application software designed to run on smartphones, tablets, and other mobile devices. The top three categories of apps download in Q6 2018 on the App Store were games, photo/video, and entertainment, while the top three downloads on Google Play were games, tools, and entertainment14. The top five most used mobile app categories were games, business, education, lifestyle, and entertainment4. Hong Kong smartphone users spent more than on mobile app (92%) then mobile web (8%)4. There are some tips for designing a successful mobile app9, 12. 1. Ensure front-end usability and back-end programming to enhance users’ using experiences The app has to deliver what users want and could be navigated easily on any platforms. Also, a set of coding and programmes have to be well developed to support the app’s front end, i.e. user interface. 2. Set up a group of beta users to test the apps and give feedback before launch Brands should invite a group of beta users to test a newly developed or updated version of the app. Beta users usually can catch bugs or offer tweaks before an app is distributed and subject to a consumer backlash. The rating of the app may change by huge amounts for small changes in it. 3. Do not mimic the design and service on desktop or laptop Other than providing the contents, features and information customers are looking for; simplicity is the key to success that can save customers time, keep them happy, and keep them engage in using the app. Apps shouldn’t try to do everything the brand’s website does. 4. Collect useful customer data for CRM Marketers have to keep collecting customer data, e.g. behaviour patterns of using the app, needs and requirements; and then use the customer knowledge to offer customised promotional information and offers, fine-tune services and functions of the app, etc. 5. Coordinate mobile apps with other multichannel platforms for mobile engagement Brands have to develop an integrated mobile contact centre in the app that offers customer service support and help for customers without leaving the app to call agent and repeat identifying and verifying their personal and account information. Brands may consider offering a real-time chat window or phone call that connect app users directly to agents who are already aware of customers’ information and what they are trying to accomplish. 6. Keep in mind the main objectives Brands should ensure its app can satisfy customers and encourage mobile engagement. They have to properly provide irresistible offers and deals, useful location-based information, sharing function on social networks, and a feedback and rating feedback system to customers, but keep in mind that “less is more” is the key to success. 7. Refine marketing strategy. Enlist a team in creating, planning, and managing the app, offering online services on the app, as well as collecting and analysing user data. Adopt metrics for improving app performance. 49 | P a g e

Chapter 4 Mobile Marketing 4.7. Chapter Summary 1. Mobile marketing is a kind of consumer-initiated communication channels that emerges in the market. Mobile marketing is not a stand-alone communication strategy, and it is compatible with other existing communication channels. Marketers have to make use of mobile marketing to collect customer data for CRM. 2. QR Codes are capable of handling more information than traditional barcodes (approximately 20 digits). 3. Text message marketing involves the use of SMS, MMS, and over-the-top messaging. 4. Location-based marketing is a kind of communication strategies based on the location of consumers. Messages could be tailor-made to customers in different (macro- or micro-) areas. Examples include NFC, geofencing, and beacons. They could be used simultaneously in a marketing campaign. 5. Mobile applications should maintain sufficient irresistible offers, useful function and important information to encourage more engagement from consumers. 4.8. Key Terms Location-based Marketing is a new form of communication strategies. It integrates mobile advertising with location-based services. It can drive local consumption. Mobile Application (Mobile App) is application software designed to run on smartphones, tablet computers and other mobile devices. Mobile Marketing is any marketing performed on or with a mobile device, such as mobile phone, smartphone and tablet. Predictive Advertising is the marketing application of predictive analysis, which involves the use of big data, artificial intelligence, and machine learning algorithms to predictive future action and behaviours. Over-the-top Messaging refers to the delivery of information over the Internet without a multiple-system operator. QR Code stands for Quick Response Code. It is a two-dimensional code with high-speed reading used to replace barcodes. Text Message Marketing is to send messages to customers with or without the carrier channels. 4.9. Concept Check Quiz 1. Define mobile marketing. 2. Give some examples of mobile marketing technologies. 3. Define QR codes and explain any two types of QR codes. 4. Explain any five considerations of text message marketing. 5. Explain the possible use of geofencing for a check-in marketing campaign. 6. Define NFC and give any five examples of its uses in marketing. 7. Utilise an example to describe the differences between geofencing and beacons. 8. Compare the differences among NFC, beacon, and geofencing in doing marketing. 9. Define mobile application. 10. Explain any six successful features of the mobile application. 50 | P a g e

Chapter 4 Mobile Marketing 4.10. Concept Challenge Quiz 1. IKEA stores in Hong Kong are considering using some mobile marketing technologies in its business. Discuss the possible uses of QR codes and NFC in its business. Hint: Answers can address the use of QR codes and NFC, respectively, and the combination uses of these two technologies. Examples could cover front office (service to customers) and back office (internal operation). 2. HK Disneyland is deciding to use location-based marketing to serve its visitors better. Discuss the possible use of these technologies in the park. Hint: Answers are expected to fully utilise all kinds of location-based marketing in the park and no overlaps (but well-integrated) among these technologies in serving visitors. The answers should mainly focus on customer aspects. 4.11. Bonus References: Six Major Features of QR Codes 1. High capacity encoding of data QR Codes are capable of handling several dozen to several hundred times more information than traditional barcodes (approximately 20 digits). Up to 7089 characters can be encoded in one code. 2. Small printout size QR Code carries information both horizontally and vertically that made it a smaller printout size than barcodes. 3. Kanji and Kana capability QR Codes are capable of handling different types of data, including numeric, alphabetic characters, Kanji, Kana, Hiragana, symbols, binary and control codes. 4. Dirt and damage resistant It has error correction capability. Data can be stored even if the symbol is partially dirty or damaged. A maximum of 30% codewords can be restored, but depending on the amount of dirt or damage. (Codeword is a unit that constructs the data area. One codeword is equal to 8 bits in the case of QR Code). 51 | P a g e

Chapter 4 Mobile Marketing 5. Readable from any direction in 360o QR Codes could be read from any direction in 360 degree. It accomplishes this task through position detection patterns located at the three corners of the symbol. The position detection patterns guarantee stable high-speed reading, avoiding the negative effects of background interference. 6. Structured appending feature QR Codes could be divided into multiple data areas. Conversely, information stored in multiple QR Code symbols can be reconstructed as a single data symbol. One data symbol can be divided into up to 16 symbols, allowing printing in a narrow area. Pictures credit: qrcode.com 4.12. References 1. http://www.qrcode.com/en/ 2. 10 best practices for text message marketing. (2013, July 29). iMedia Connection. Retrieved July 7, 2014, http://www.hot-mob.com/wp/10-best-practices-for-text-message-marketing/ 3. Hong Kong tops asia in mobile internet usage. (2013, August 23). Computerworld Hong Kong. Retrieved July 7, 2014, http://cw.com.hk/news/hong-kong-tops-asia-mobile-internet-usage 4. 2018 Hong Kong Mobile Usage Report (2018). Hotmob. Retrieved July 15, 2019, http://newsletter.hot- mob.com/2018/report/2018_Hong_Kong_Mobile_Usage_Report.pdf 5. How do mobile devices affect shopping habits? (2013, June 7). Hotmob. Retrieved July 7, 2014 from http://www.hot-mob.com/wp/how-do-mobile-devices-effecting-shopping-habits/ 6. The Connected Consumer Survey 2014 (n.d.). Consumer Barometer with Google. Retrieved January 8, 2015, https://www.consumerbarometer.com/en/ 7. Giza, M. (2013, December). Prediction for 2014: mobile apps will be the most revolutionary technology. TechTarget. Retrieved July 7, 2014, from http://searchsoa.techtarget.com/podcast/Prediction-for- 2014-Mobile-apps-will-be-the-most-revolutionary-technology 8. Hopkins, J. (2012, January 4). 7 best practices for a successful mobile check-in campaign [Web log post]. Retrieved http://blog.hubspot.com/blog/tabid/6307/bid/30425/7-Best-Practices-for-a- Successful-Mobile-Check-In-Campaign.aspx 9. Viswanathan, P. (2014). Mobile app marketing – strategies for success [Web log post]. Retrieved July 22, 2014, from http://mobiledevices.about.com/od/marketingapps/tp/ Mobile-App-Marketing-Strategies-For-Success.htm 52 | P a g e

Chapter 4 Mobile Marketing 10. Badalian J. (2014, April 14). MobileSmith integrates with Gimbal to offer context awareness marketing tools using geofencing and beacons [Web log blog]. Retrieved from http://www.mobilesmith.com/mobilesmith-adds-gimbal-geofencing-beacons/ 11. https://www.gimbal.com/ 12. Kittle, C. & McKeon, A. (2013, March). Moving service: staying connected with mobile apps. TechTarget. Retrieved July 7, 2014, from http://searchcrm.techtarget.com/ezine/Business-Information/Moving- Service-Staying-Connected-With-Mobile-Apps 13. The Connected Consumer Survey 2016 (n.d.). Consumer Barometer with Google. Retrieved July 25, 2016, https://www.consumerbarometer.com/en/ 14. Yeh, O. (2019, February 20). Top App Categories Worldwide for Q4 2018 by Downloads. [Web log blog]. Retrieved July 15, 2019, from https://sensortower.com/blog/top-categories-worldwide-downloads- q4-2018. 15. DR4WARD (2016, January 8). What are 6 simple steps to short message service SMS mobile campaigns. [Infographic]. Retrieved August 1, 2016, from DR4WARD Website: http://www.dr4ward.com/dr4ward/2016/01/what-are-6-simple-steps-to-short-message-service-sms- mobile-campaigns-infographic-.html 16. Zoroglu, K. (2015, March 26). Bigfoot360 Partners with Estimote [Web log post]. Retrieved January 4, 2017, https://www.linkedin.com/pulse/bigfoot360-partners-estimote-kaan-zoroglu?redirectFrom Splash=true 17. Compare Proximity Technology. Retrieved January 5, 2017, from http://bealder.com/en/compare- proximity-technology-beacon-wifi-geofencing-ultrason-qrcode-and-nfc/ 18. Girish, D. (2015, July 17). iBeacon vs NFC vs GPS: Which Indoor Location Technology will your Business Benefit from? [Web log blog]. Retrieved January 5 , 2017, from https://blog.beaconstac.com/2015/07/ibeacon-vs-nfc-vs-gps-which-indoor-location-technology-will- your-business-benefit-from/ 19. Krify, M. (2015, December 23). Geofencing: Increasing User Engagement & Enhancing User Experience [Web log blog]. Retrieved January 5, 2017, from https://krify.co/tag/geofencing-and-rfid/ 20. The Connected Consumer Survey 2017 (n.d.). Consumer Barometer with Google. Retrieved July 2, 2019, https://www.consumerbarometer.com/en/ 21. Rossum, V. B. (2019, March 20). 6 Big Mobile Marketing Trends CMOs Must Watch in 2019. [Web log blog]. Retrieved July 3, 2019, from https://www.business2community.com/marketing/6-big-mobile- marketing-trends-cmos-must-watch-in-2019-02180094 22. Katumba, K. (2018, November 30). Mobile Marketing Trends 2019. [Web log blog]. Retrieved July 3, 2019, from https://www.smartinsights.com/mobile-marketing/mobile-marketing-trends-2019/ 23. Gao, O. (2019, February 13). Top 4 Mobile Marketing Trends of 2019. [Web log blog]. Retrieved July 3, 2019, from https://www.digitaldoughnut.com/articles/2019/february/top-4-mobile-marketing- trends-of-2019 24. Lubek, S. (2019, January 21). 8 Mobile Marketing Trends and Predictions for 2019. [Web log blog]. Retrieved July 3, 2019, from https://www.targetmarketingmag.com/article/8-mobile-marketing- trends-and-predictions-for-2019/ 25. SendSMS Team (2019, March 29). Mobile Marketing Trends in 2019. [Web log blog]. Retrieved July 3, 2019, from https://sendsms.global/blog/mobile-marketing-trends/ 53 | P a g e

Chapter 5 Social Media and Content Marketing Chapter 5 Social Media and Content Marketing 5.1. Chapter Objectives • Get familiar with various types of social media technologies. • Identify opportunities, challenges and risks of using social media in CRM. • Recognise the tips for creating great social media contents. • Understand the importance of content marketing to CRM. 5.2. Background Information on Social Media Social media is a wide range of Internet-based applications, tools or technologies that allow the creation, collaboration, and exchange of user-generated contents15. People or organisations can utilise these applications to create, share, comment, and exchange information in a virtual community15. 5.2.1. Social Media Technologies Examples of social media technologies include media sharing sites, blogs/microblogs, social bookmarking sites, virtual/online communities, social networking sites (SNSs), and virtual worlds16. These types of social media technologies have different levels of interaction with users16. Usually, media sharing sites and SNSs are adopted in a CRM context. Figure 5-1 Types of Social Media Technologies16 Media Sharing Sites •Allow users to upload, organise, and share multimedia (Weakest Level of Interaction) materials with people or selected communities Blogs/Microblogs •Allow authors post their writing or information on the web, hoping someone will read them Social Bookmarking Sites •Allow users collaboratively use tags to annotate and categorise the web contents they found interest Virtual/Online Communities •Allow individuals share specific information and interests through interactive tools on a website Social Networking Sites •Facilitate individuals build social relationships and interests among friends and acquaintances Virtual Worlds •Provide computer-simulated environments in websites where (Strongest Level of Interaction) people can live in a virtual world 54 | P a g e

Chapter 5 Social Media and Content Marketing 5.3. Background Statistics of Social Media 5.3.1. Company Aspect Among those social media platforms, Facebook remains as the most commonly used social media platform among marketers5, 29, 32, 44. Instagram is the one with the fastest adoption growth. It increased from 44% in 2016 to 73% in 2019. Twitter, as compared, has shown a decreasing trend that it is less used by marketers to communicate with consumers. LinkedIn and Pinterest are able to keep its popularity among marketers, while YouTube keeps a steady growth in recent three years. Snapchat is used, but its popularity among marketers is not as good as other platforms. 100% Figure 5-2: Commonly Used Social Media Platform 5, 29, 32, 44 95% 90% 93% 94% 94% 94% 85% 80% 76% 75% 73% 70% 65% 67% 68% 66% 60% 55% 62% 59% 50% 45% 58% 40% 35% 56% 56% 30% 25% 53% 54% 54% 20% 15% 50% 10% 5% 44% 45% 0% 40% 30% 27% 28% 5% 7% 8% 6% 2016 Instagram 2017 LinkedIn 2018 Pinterest 2019 Facebook Twitter YouTube Snapchat 55 | P a g e

Chapter 5 Social Media and Content Marketing About the most important social media platform for marketers to communicate with consumers, Facebook is the top priority, but its importance decreased from 67% in 2018 to 61% in 20195, 29, 32, 44. The importance of LinkedIn and Instagram follows Facebook’s, but Instagram is more competitive in the future. Its importance is increasing in recent years. YouTube, Twitter, and Pinterest were, however, relatively less important from the marketers’ perspective. Figure 5-3 The Most Important Social Media Platform 5, 29, 32, 44 70% 67% 65% 62% 61% 60% 55% 55% 50% 45% 40% 35% 30% 25% 20% 16% 14% 18% 15% 12% 9% 12% 14% 10% 7% 10% 5% 5% 4% 5% 4% 4% 2% 4% 2% 2% 2% 2019 2017 0% 2018 2016 Facebook Instagram Twitter LinkedIn YouTube Pinterest 56 | P a g e

Chapter 5 Social Media and Content Marketing When asking the marketers about the social media platforms that they want to learn more about for their business, Instagram takes over the role of Facebook as the top priority in 20195, 29, 32, 44. The attractiveness of Facebook was decreased from 79% in 2018 to 69% in 2019, and YouTube is going to catch its position with 67% of marketers would consider learning it more in 2019. Other platforms are showing a decreasing trend. This may occur due to the increasing adoption and understanding of these platforms among marketers. Figure 5-4 Media Platforms Marketers Want to Learn More About 5, 29, 32, 44 80% 80% 79% 75% 74% 73% 71% 72% 70% 69% 67% 65% 65% 64% 63% 60% 61% 61% 5598%% 57% 57% 55% 55% 53% 50% 48% 45% 45% 44% 42% 40% 39% 35% 36% 30% 28% 28% 25% 20% 19% 15% 2017 2018 2019 2016 Facebook Instagram Twitter LinkedIn YouTube Pinterest Snapchat 5.3.2. Consumer Aspect In 2019, there were 3.5 billion active social media users with a global penetration of 45%30, as compared to 2.3 billion active social media users and 31% global penetration rate in 201633. Among the active users, Facebook is the top social networking platform and followed by YouTube, Instagram30. On average, Internet users have 8.9 social media accounts, and they spent 136 minutes daily on social media30. The majority of social media audience is those aged 25 to 34 (32%) and followed by those aged 18 to 24 (27%), 35 to 44 (16%), 45 to 54 (10%), and 13 to 17 (7%)30. Users aged 16 to 24 are more enthusiastic about social media, as they usually spent more time on social media with around 3 to 4 hours daily45 57 | P a g e

Chapter 5 Social Media and Content Marketing 5.3.3. Summary of Statistics Figure 5-5 Statistic #1. Facebook is the King! Commonly used by marketers The most important platform from marketers' perspective Facebook is the The second important platform marketers want to learn more King! The top social media platform among ultimate (active) consumers Figure 5-6 Statistic #2. Instagram is a strong rival It has the fastest adoption growth among marketers. The first platform that marketers want to learn more Figure 5-7 Statistic #3. Facts about Social Media Users 3.5 billion active social media users The global penetration reached 45% Each Internet user has an average of 8.5 social media accounts Facebook got more active users and active usage Younger users spent more hours, usually 3 to 4 hours, on social media 58 | P a g e

Chapter 5 Social Media and Content Marketing 5.3.4. Social Media Marketing The social media world is continuously changing in both consumer and marketer aspects. It is commonly expected that there would be some changes in the social media world14, 37, .38, 39, 40, 41, 42: 1. Shifting to a mobile-first strategy. Mobile devices have become the primary screen for most social media users. The mobile devices generated more traffic than desktop and tablet search. A mobile- friendly website or app is a must for marketers. They have to spend more time and budget on perfecting the brand story across all devices as well. 2. Creating the right-time contents with real-time engagement. Having the right contents to be delivered to the right audience at the right time remained as the trend of social media marketing, but real-time responses should be taken into account. It was found that 70% of Twitter users expect a response from brands they have contacted, and 53% want a response from the brand in less than an hour, and this figure jumped to 72% when they have made a complaint. 3. More focus on content marketing. It would be more content creation, and the budgets are expected to grow in the future. The focus will be changed to the measurement of ROI and the effectiveness of the content. 4. Visual marketing drives engagement. Visual marketing is taking over the engagement on social media. The engagement of Instagram posts is up 416% in just two years. Visual marketing will continue to grow in the future. Proper planning about the use of multimedia and graphics for social media is needed. 5. Video contents continue to dominate. Online users love watching videos. This can be proven by the popularity of YouTube (over a billion users) and the daily videos on Facebook (8 billion views daily as on November 2015). Also, contents within videos receive more engagement rates than those contain plain text. Various types of videos, like explainer videos, educational videos, and entertainment videos, could be used. a. Explainer videos show audiences how to use the products and also the benefits or features of the products41. b. Educational videos are used to instruct audiences and also market the products/brands to them41. c. Entertainment videos are used to keep audiences entertained and engaged through a series of short and shareable videos41. 6. The popularity of in-the-moment contents. Live streaming or in-the-moment updates have become very popular. Existing social media platforms like Snapchat, Instagram, and Facebook are providing live streaming for users, while there are also new entrants offering live streaming services, for examples TikTok, Caffeine, are Lasso (launched by Facebook)46. It would make huge changes to marketers in how they use social media in the new era. 7. “Buy” buttons on social media. Social commerce – the act of selling via social networks – will likely increase in the future. “Buy” buttons have been showing up on social networks like Pinterest, Instagram, and Twitter, which allow social media users to purchase from the sites directly. It helps marketers effectively reach their potential prospects and increase the conversion rate. 59 | P a g e

Chapter 5 Social Media and Content Marketing 5.4. Opportunities and Challenges of Using Social Media in CRM When adopting social media in CRM, we usually name it as Social CRM. Social CRM brings a large number of opportunities to enrich traditional CRM practices, but there are also some challenges raised. The opportunities and challenges are in three aspects6: Aspect 1: Data Processing Enormous data could be collected on social media, but this creates the challenge to mine the social data into meaningful information. Marketers should have appropriate skills and analytics to mine and to manage the data for subsequent CRM or marketing actions. Aspect 2: Use of Data Conservations among consumers on social media are made in a naturalistic and volunteering environment. It can reveal consumers’ true preference and opinions that marketers can offer more personalised customer service support, discover new product/service ideas, and identify brand advocates, etc. However, one-to-one support is not doable for most B2C companies. Marketers have to adopt automated tools to streamline and prioritise consumers’ enquiries, data and requests to enhance their experience but remain scalable and cost-effective business operation. Aspect 3: Impact on Financial Metrics Social media allow marketers to provide a more engaging consumer experience, which is correlated with company financial performance, but the causal effect is not yet confirmed. Other than determining quantitative ROI, it is necessary to adopt qualitative metrics for measuring the effectiveness of social media strategy, such as customer feedback, brand advocates and influencers, publicity, brand awareness, etc7. Figure 5-8 Opportunities and Challenges of Social Media in CRM Aspects: (1) (2) (3) Use of Data Data Impact on Financial Processing Metrics Opportunities: Faster collection More complete Correlation of consumer view of between information consumers engagement and financial metrics Challenges: Availability of Scalability Causal skills and relationship analytics from engagement to financial metrics 60 | P a g e

Chapter 5 Social Media and Content Marketing 5.5. Top Five Risks When Using Social Media in CRM Social media offers tremendous upside for business, but at the same time, it opens to enormous risks when not managing the media properly. The top five risk of using social media and respective solutions for marketers8: 1. Reputation management: Social media may involve negative publicity, which causes a risk to a company’s reputation. Legal issues may also arise if a company gives an inappropriate comment about another company on a social media platform, for instance. Solution: Do not give junior employees full control. They are less experienced in managing social media, and that could cause irreparable damage to a brand. The company can involve senior employees to support social media communication. 2. Security: Confidential information may be leaked outside because of hacking, spy-ware, bugs, or weak security systems. Solution: Work with professional or IT department to ensure proper privacy and security settings are in place to protect confidential information, to avoid having customer accounts hacked, or falling victim to cyber theft. 3. Two-way dialogue and criticism: Social media allows a company to interact directly with customers in a real-time; it also gives them a public platform to voice dissatisfaction. Solution: Carefully monitor the social media platform, quickly identify negative feedback and address it before it gains support. 4. Trust: Trust employees in using social media to communicate with consumers; otherwise, it can present a risk that the brand reputation may be ruined by employees’ actions or feedback on social media. Solution: Offer an extensive training program for the entire organisation highlighting the do’s and don’ts of social media strategy and assign trusted employees to manage social media marketing. 5. Wasting company time: Social media can be addictive, and there is a risk that employees will spend too much time on it, compromising their work and then the business operations. Solution: Periodically monitor what social media employees visit and how much time involved. Involve human resources staff or supervisory staff to discuss with those employees who spend an unnecessary amount of time on the media sites. Figure 5-9 Top Five Risks of Using Social Media in CRM Reputation Security Two-way Dialogue and Management Criticism Trust Wasting Company Time 61 | P a g e

Chapter 5 Social Media and Content Marketing 5.6. Content Marketing for Social Media Marketing In the 21st century, no business can be successful without a sound social media strategy to communicate with customers or potential consumers. The rapidly changing nature of social media makes it critical for marketers to understand how to leverage social media in CRM strategy. Creating good social media contents is the key to attract audiences and enhance conversion rate. Content marketing takes a supporting role in this area. 5.6.1. Content Marketing Content marketing is a way of marketing products or services to target customers by creating consistent, informative, quality, valuable, engaging, and relevant contents on media that attracts and engages the customers and possibly encourages profitable customer action17. It could be used in channels like website, blog, email, magazine, newsletter, and social media. The contents could be in the format of the text, video, image, infographic, or a combination of them. More and more companies are incorporating content marketing in a CRM context. Figure 5-10 Formats of Content Marketing Text Video Image Infographic A combintion of the above 5.6.2. Adopting Content Marketing in Social Media Strategies Great contents should have the following six features: valuable, engaging, different, (visually) attractive, relevant (to the brand), and convenient (for viewing) 9, 10, 11, 43. Figure 5-11 Six Features of Great Contents for Social Media 9, 10, 11, 43 Valuable Engaging Different Attractive Relevant Convenient Shows brand Shows a Shows brand Cohesive Shows Types of expertise friendly personality creative product media used brand direction relevance Works on Shares a Tells a brand Gives a fresh Invests in Shows different useful tip story take on great graphic service platforms things relevance Reveals Makes design Consistent insight audiences Surprises Matches with the smile or audiences Chooses the with brand overall social right images media plan laugh identity 62 | P a g e

Chapter 5 Social Media and Content Marketing 5.6.3. Benefits of Content Marketing Reports show that every 9 out of 10 businesses use some form of content marketing. More marketers plan to do more content marketing in business in the next year. For organisations using content marketing in business, they can enjoy the following eleven benefits: Figure 5-12 Eleven Benefits of Content Marketing18 Increase Web Traffic Improve Sales Lead Increase Sales Lead More Social Media Quality Quantity Sharing Higher Search Ranking Increase Visitor's Time More Qualitative Greater Subscriber Spent on Website Feedback from Growth Customers Increase Customer More Cross-selling More Cost Savings Loyalty 5.6.4. Types of Content Marketing Companies There are five main types of content marketing companies, including Content Creation, Content Curation, Workflow Management, Content Distribution, and Content Analytics31. They provide different kinds of services about content marketing for marketers with different needs. Figure 5-13 Types of Content Marketing Companies31 Content Creation Working on technology-enabled solutions to help marketers create content at scale. •Examples: CrowdFlower, WriterAccess, textbroker, Skyword. Content Curation Helping marketers syndicate content and repurpose high-quality content for their own properties. •Examples: curata, Listly, Scoop.it!, Storify. Workflow Management Helping marketers manage their editorial calendars, assign writers to projects, and distribute/analyse content within their platforms. •Examples: Contently, Google docs, GatherCrontent, Percolate. Content Distribution Helping marketers reach a broader audience. •Examples: livefyre, Little Bird, One Spot, Outbrain. Content Analytics Helping marketers measure the ROI and effectiveness of all types of content. •Examples: Google Analytics, Kissmetrics, SimpleReach, Mixpanel. 63 | P a g e

Chapter 5 Social Media and Content Marketing 5.7. Chapter Summary 1. Social media technologies include media sharing sites, blogs/microblogs, social bookmarking sites, online/virtual communities, social networking sites (SNSs), and virtual worlds. 2. Facebook is the king among social media, but Instagram is starting to rival Facebook. 3. The key performance indicators for social media strategy have three major categories: reach, engagement, and conversion. 4. There are five major risks when using social media in CRM. It is difficult for marketers to manage, so it is necessary to adopt solutions when using social media to manage the relationship with customers. 5. Content marketing is a new marketing strategy used to create consistent, relevant, engaging, informative, quality, and valuable contents for different online communication channels. 5.8. Key Terms Content Marketing is a way of marketing products or services to target customers by creating relevant, engaging, informative, quality, and valuable contents on media that attracts and engages the customers and possibly encourages profitable customer action17. Social Media refers to a wide range of Internet-based applications, tools or technologies that allow the creation, collaboration, and exchange of user-generated contents15. People or organisations can utilise these applications to create, share, comment, and exchange information in a virtual community15. 5.9. Concept Check Quiz 1. Describe the benefits of social media. 2. Name any three types of social media technologies. 3. Describe the popularity of Facebook among social media platforms from 2016 to 2019. 4. Explain any two opportunities of social media in CRM. 5. Describe any three risks when using social media in CRM and their respective solution for marketers. 6. Describe any five tips of social media strategy. 7. Define content marketing. 8. Describe the five content issues about content marketing. 9. Describe the formats of content marketing. 10. Describe any five benefits of content marketing to marketers. 11. Describe any one type of content marketing companies with an example. 5.10. Concept Challenge Quiz 1. Fujifilm wants to develop a social media strategy to promote its instant-still camera “Instax” among college/university students and young adults. Suggest a cost-effective social media campaign for Fujifilm. Hint: Answers have to integrate different media platforms among the three media categories. A good strategy should have considered the tips of social media strategy. Also, the strategy should be cost- effective to reach the appropriate target audiences. 64 | P a g e

Chapter 5 Social Media and Content Marketing 2. Fujifilm is planning to adopt social media in CRM. Advise Fujifilm five major issues that will be encountered in using social media and their respective solution. Hint: Answers have to address the potential risks of using social media and then the respective solutions for handling the risks. Your explanation should apply to the case situation. 3. Fujifilm is planning to promote its Instax with its potential customers on Facebook. Draft a Facebook post for Fujifilm. Hint: Answers have to address the content issues of content marketing. More relevant references about drafting a Facebook post 5.11. References 1. https://www.facebook.com/help/341425252616329 2. http://www.oxforddictionaries.com/definition/english/social-media 3. IBM Corporation (2013, February). IBM Social Analytics: The science behind social media marketing. Retrieved July 18, 2014, from ftp://public.dhe.ibm.com/common/ssi/ecm/en/ytw03192usen/YTW03192USEN.PDF 4. Bailey, C. (2014, April 28). An overview of paid, earned and owned media [Web log post]. Retrieved from http://xen.com.au/overview-paid-earned-owned-media/ 5. Stelzner, M. A. (2018, May). 2018 social media marketing industry report. Retrieved August 2, 2019, from Social Media Examiner Website: https://www.socialmediaexaminer.com/social-media- marketing-industry-report-2018/ 6. Liu-Thompkins, Y. P. (2010, March 11) Social CRM – Opportunities and Challenges [Web log post]. Retrieved from http://www.yupingliu.com/wordpress/2010/03/11/social-crm-opportunities-and- challenges/ 7. Act-on Software. (n.d.). Five best practices for achieving social media ROI. Retrieved July 22, 2014, from http://docs.media.bitpipe.com/io_11x/io_114228/item_879864/five-best-practices-for- achieving-social-media-roi.pdf 8. Nicholls, S. (2012, June 26). Tip five risks companies face when using social media and how to avoid damaging the brand [Web log post]. Retrieved from http://socialmediainbusiness.com/top-five-risks- companies-face-when-using-social-media 9. Nicholls, S. (2012, May 14). Ten essential social media tips for a senior executive [Web log post]. Retrieved from http://socialmediainbusiness.com/10-essential-social-media-tips-senior-executive 10. Allen B. (2010, January 27). 10 steps to a practical social media business strategy. [Web log post]. Retrieved from http://searchcrm.techtarget.com/news/2240016140/10-steps-to-a-practical-social- media-business-strategy 11. Butters, K. (2014, July 4). Top 5 mistakes businesses make on social media. [Web log post]. Retrieved from http://xen.com.au/top-5-mistakes-businesses-make-social-media/ 12. Petroff, A. & Yan, S. (2014, July 21). China food scandal hits McDonald’s KFC. CNN Money. Retrieved from http://money.cnn.com/2014/07/21/news/companies/kfc-mcdonalds-china/ 13. Go-Globe (2014, December 26). Social media addiction – statistics and trends. [Infographic]. Retrieved from http://www.go-globe.com/blog/social-media-addiction/ 14. Bhandarkar, M. (2014, December 1). JSH&A forecasts five social media trends for 2015. Retrieved from http://www.jsha.com/blog/jsha-forecasts-five-social-media-trends-for-2015/ 15. Ngai, E. W. T., Tao, S. S. C., and Moon, K. K. L. (2015). Social media research: Theories, constructs, and conceptual frameworks. International Journal of Information Management, 35, 33-44. 65 | P a g e

Chapter 5 Social Media and Content Marketing 16. Ngai, E. W. T., Moon, K. K. L., Lam, S. S., Chin, E. S. K., and Tao, S. S. C. (2015). Social media models, technologies, and applications: An academic review and case study. Industrial Management & Data Systems, 115(5), 769-802. 17. Infographics (n.d.). The do’s and dont’s of content marketing [Infographic]. Retrieved July 10, 2015, from http://graphs.net/content-marketing-aspects.html 18. Captora (n.d.). Ascend to new heights in content marketing [Infographic]. Retrieved July 13, 2015 from https://www.pinterest.com/pin/330099847663033040/ 19. Mycleveragency (n.d.). How to create perfect posts on social platforms [Infographic]. Retrieved July 20, 2015 from https://www.pinterest.com/pin/330099847665316696/ 20. Ahmad, I. (2014, April 21). How to post on Facebook, Twitter, Instagram and Pinterest [Infographic]. Retrieved July 20, 2015 from http://www.digitalinformationworld.com/2014/04/10-rules-for-posting- on-social-media-every-business-needs-to-know.html 21. Sau, N. (2015, January 14). How to create the perfect post for social media channels [Infographic]. Retrieved July 20, 2015 from http://navneetsau.com/how-to-create-the-perfect-post-for-social- media-channels/ 22. Army Wife to Suburban Life (2014, May 21). How to get more followers on Instagram [Web log post]. Retrieved July 20, 2015 from http://armywifetosuburbanlife.com/2014/05/21/how-to-get-more- followers-on-instagram/ 23. Hoskins, K. (2014, August 18). 6 ways to use Instagram more effectively [Web log post]. Retrieved July 20, 2015 from http://www.iheartfaces.com/2014/08/6-ways-to-use-instagram-more-effectively/ 24. Fitzpatrick, P. (2014, September 8). Instagram 101: 7 keys steps to Instagram Success [Web log post]. Retrieved July 20, 2015 from http://pegfitzpatrick.com/instagram-101-key-steps-instagram-success/ 25. Branfton (n.d.). Top 10 ways to optimise your business YouTube channel [Infographic]. Retrieved July 20, 2015 from https://s-media-cache- ak0.pinimg.com/736x/e7/c1/da/e7c1da79dd3c81c46afd8d7e39130fe7.jpg 26. Oliur (2012, July 19). 5 easy steps to becoming a YouTube partner [Web log post]. Retrieved July 20, 2015, from http://theultralinx.com/2012/07/5-easy-steps-youtube-partner/ 27. Shervington, M. (2013, November 15). Your first month on Google+ [Web log post]. Retrieved July 20, 2015 from https://www.plusyourbusiness.com/beginners-guide-google-plus/ 28. Cabrera, P. (2014, Feb 12). How-to: Build a strong Google Plus presence and get more followers [Web log post]. Retrieved July 20, 2015 from http://www.twelveskip.com/marketing/social- media/1221/build-a-strong-google-plus-presence-gain-followers 29. Stelzner, M. A. (2017, May). 2017 social media marketing industry report. Retrieved August 2, 2019, from Social Media Examiner Website: https://www.socialmediaexaminer.com/social-media- marketing-industry-report-2017/ 30. We Are Social. (2019). Global Digital Report 2019 - We Are Social. [Online]. Retrieved August 2, 2019 from https://wearesocial.com/global-digital-report-2019. 31. Catherine (2014, May 7). The content marketing landscape – a comprehensive look [Infographic]. Retrieved January 8, 2015 from http://infographicb2b.com/2014/05/07/content-marketing-landscape-comprehensive-look- infographic/ 32. Stelzner, M. A. (2016, May). 2016 social media marketing industry report. Retrieved August 2, 2019, from Social Media Examiner Website: https://www.socialmediaexaminer.com/social-media- marketing-industry-report-2016/ 33. Chaffey D. (2016, April 21). Global social media research summary 2016 [Web log post]. Retrieved July 26, 2016, from Smart Insights Website: http://www.smartinsights.com/social-media-marketing/social- media-strategy/new-global-social-media-research/ 66 | P a g e

Chapter 5 Social Media and Content Marketing 34. Mander, J. (2015, January 2013). Internet users have average of 5.54 social media accounts [Web log post]. Retrieved July 26, 2016, from Global Web Index Website: http://www.globalwebindex.net/blog/internet-users-have-average-of-5-social-media-accounts 35. Pick, T. (2016, January 19). 47 superb social media marketing stats and facts [Web log post]. Retrieved July 26, 2016, from Business 2 Community Website: http://www.business2community.com/social-media/47-superb- social-media-marketing-stats-facts-01431126#m5zszmqIZJFwEs12.99 36. Watson R. (2014, June 14). 6 myths about social sharing [Web log post]. Retrieved July 26, 2016, from Social Media Today Website: http://www.socialmediatoday.com/content/6-myths-about-social- sharing 37. Expert Commenter (2016, July 14). 15 Social Media & Search Engine Marketing Trends in 2016 [Web log post]. Retrieved July 26, 2016, from Smart Insights Website: http://www.smartinsights.com/digital- marketing-strategy/15-social-media-search-engine-marketing-trends- 2016/?utm_content=buffer160f3&utm_medium=social&utm_source=pinterest.com&utm_campaign =buffer 38. Beese J. (2016, January 4). 6 social media trends that will take over 2016 [Web log post]. Retrieved July 26, 2016, from Sprout Social Website: http://sproutsocial.com/insights/social-media-trends/ 39. YouTube Press (2016). Statistics. Retrieved July 26, 2016, from YouTube Website: https://www.youtube.com/yt/press/statistics.html 40. Clayway Staff (2016, April 12). Top social media marketing trends to help marketers dominate in 2016 [Web log post]. Retrieved July 26, 2016, from Clapway Website: http://clapway.com/2016/04/12/social-media-marketing-trends-marketers/. 41. Wirth, K. (2016, January 8). 7 social media marketing trends for 2016 [Web log post]. Retrieved July 26, 2016, from Practical Ecommerce Website: http://www.practicalecommerce.com/articles/119904-7- social-media-marketing-trends-for-2016 42. The Connected Consumer Survey 2016 (n.d.). Consumer Barometer with Google. Retrieved July 25, 2016, https://www.consumerbarometer.com/en/ 43. Elliott, A. (2013, July 20). Simple and effective tips for creating great social content [Infographic]. Retrieved July 26, 2016, from Social Media Today Website: http://www.socialmediatoday.com/content/simple-and-effective-tips-creating-great-social-content- infographic 44. Stelzner, M. A. (2019, May). 2019 social media marketing industry report. Retrieved August 2, 2019, from Social Media Examiner Website: https://www.socialmediaexaminer.com/social-media- marketing-industry-report-2019/ 45. Globalwebindex.com (2019). 2019 Q1 Social Flagship Report [Online]. Retrieved August 2, 2019, from globalwebindex: https://www.globalwebindex.com/reports/social 46. Bump, P. (2019, July 23). 5 New Social Media Platforms Marketers Should Watch in 2019 [Web log post]. Retrieved August 2, 2019, from Hubspot: https://blog.hubspot.com/marketing/new-social- media?utm_campaign=Marketing%20Blog%20Weekly%20Email%20Sends&utm_source=hs_email&ut m_medium=email&utm_content=75177399 67 | P a g e

Chapter 6 Managing Customer Data Chapter 6 Managing Customer Data 6.1. Chapter Objectives • Differentiate different types of data. • Get familiar with customer data integration (CDI). • Recognise the opportunities of big data and data-driven marketing era. • Discuss privacy and ethical dilemmas. 6.2. Categorising Data Data is critical to business operation process and CRM strategy. As a CRM data analyst, the first thing about data management is to understand the different classification of data: (1) categorical and metric data; (2) primary, secondary and derived data; (3) individual and household data. The following tables show the characteristics of these data1,2: The first classification is categorical and metric data. Categorical data could be further divided into nominal data and ordinal data, while metric data include interval data (discrete in nature) and ratio data (continuous in nature). These types of data have certain features. Nominal data only has the assignment property, while the ordinal data has both assignment and order properties. Interval data has the assignment, order, and distance properties, and ratio scale has all four properties (i.e. assignment, order, distance, and origin). Figure 6-1 Categorical and Metric Data Types Assignment Order Distance Origin Property Property Property Property Categorical Nominal Yes Yes Data Ordinal Yes Yes Metric Data Interval Yes Yes Yes Ratio Yes Yes Yes Types of Description / Features Property Assignment Measurements with unique descriptors or labels Order Measurements with hierarchical rank-order feature among the descriptors Distance Measurements with absolute differences between the descriptors or scale points Origin Measurements with the true natural zero among the scale points 68 | P a g e

Chapter 6 Managing Customer Data Figure 6-2 Examples of Categorical and Metric Data Types Examples What is your gender?  Female  Male Nominal Do you like watching movies?  Yes  No Which type of fruits do you like most? Categorical Data  Apple  Orange  Melon  Grapes Ordinal Please rank your preferences of the following fruits from 1 The Most Preferred to 3 The Least Preferred ___ Apple ___ Orange ___ Melon ___ Grapes Which category best describes your knowledge about our repair services?  Complete  Good  Basic  Little  No How likely would you continue to purchase at our shop?  Very Likely  Likely  Unlikely  Very Unlikely Please rate your satisfaction levels towards our repair services from 1 Very Dissatisfied to 6 Very Satisfied:  Very Dissatisfied  Dissatisfied  Slightly Dissatisfied Metric Data  Slightly Satisfied  Satisfied  Very Satisfied Interval Please rate the performance of our delivery services from 1 Very Bad to 5 Very Good:  Very Bad  Bad  Neither Bad Nor Good  Good  Very Good What is your monthly income?  $0 to $10,000  $10,001 - $20,000  $20,001 - $30,000  $30,000 or above What is your monthly income? $____________ Ratio On average, how much do you spend on clothing per month? $____________ How many products did customer purchase in one transaction at our store today? __________ The second classification is related to the originality of the data: primary, secondary, and derived. Figure 6-3 Primary, Secondary and Derived Data Primary Data Secondary Data Derived Data • Collected directly from the • Collected from a party other • Information created or original source. than the one for which the inferred from other data represents. data. • Examples: data collected from membership form for • Examples: data of a new • Examples: inferred membership system, consumer referred by an consumers’ spending comment cards for improving existing customer, industrial potential based on an service performance. report or information analysis of income, living released by professional area, family status, and bodies. age. 69 | P a g e

Chapter 6 Managing Customer Data The last classification is about the individual or grouped data: individual and household data. Figure 6-4 Individual and Household Data Individual Data Household Data • Data attributed to a specific person. • Data attributed to individuals under the same household. • Examples: individual spending on personal care products, individual satisfaction towards • Examples: household spending on personal an online shopping experience. care products, household satisfaction towards estate management services. Figure 6-5 Game Corner Instruction: Use a tick to classify the following data into respective data types Measures Types of Data 1. Data source: membership form of a coffee brand  Interval data  Nominal data Subject: individual members  Ratio data  Ordinal data Data: How frequently do you drink coffee per week? (a) 1 to 3 times  Primary  Secondary  Derived (b) 4 to 6 times (c) 7 to 9 times data data data (d) 10 times or more Original collection purpose: find out the consumption  Individual data  Household data pattern Action to be taken: better understand each new member for further promotion and marketing 2. Data source: transaction database of a coffee brand  Interval data  Nominal data  Ratio data  Ordinal data Subject: members’ records  Primary  Secondary  Derived Data: A column of each member’s profile recorded the cumulative number of transactions made since the first data data data purchase in the database summary. Original collection purpose: keep records of the transaction Action to be taken: the brand decides to screen out  Individual data  Household data those who have made at least 10 transactions in the last month for a new campaign 3. Data source: satisfaction survey of a coffee brand  Interval data  Nominal data  Ratio data  Ordinal data Subject: individual customers  Primary  Secondary  Derived Data: Please rate your satisfaction towards our coffee drinks from 1 strongly dissatisfied to 10 strongly data data data satisfied _________ Original collection purpose: services recovery Action to be taken: the brand decides to screen out those who rated 5 or less to have a services recovery plan  Individual data  Household data 70 | P a g e

Chapter 6 Managing Customer Data Measures Types of Data 4. Data source: a research report about household  Interval data  Nominal data consumption of health products, which was purchased  Ratio data  Ordinal data from a research agency  Primary  Secondary  Derived Subject: households data data data Data: It is reported that families with seniors aged 40 or above researched more information about health  Individual data  Household data products  Interval data  Nominal data Original collection purpose: general consumer  Ratio data  Ordinal data information for the industry  Primary  Secondary  Derived Action to be taken: the brand decides to plan a new set of communication strategies to reach this segment data data data 5. Data source: transaction database of a tea brand  Individual data  Household data Subject: individual members  Interval data  Nominal data  Ratio data  Ordinal data Data: the brand infers that members are innovators and enjoy trying new tea products  Primary  Secondary  Derived Original collection purpose: keep records of the data data data transaction  Individual data  Household data Action to be taken: the brand decides to promote a new tea product to this group of members according to its  Interval data  Nominal data prediction  Ratio data  Ordinal data 6. Data source: membership database of a personal care  Primary  Secondary  Derived retailer data data data Subject: households  Individual data  Household data Data: the brand classified the household members into three loyalty groups: high, medium, and low; which was derived from the consumption patterns and cumulative purchase amount Original collection purpose: keep records of the consumption behaviours of each household member Action to be taken: the brand decides to adopt differentiation strategies to reach these three groups 7. Data source: a research report about the perceived benefits of drinking tea among consumers, which was purchased from a research agency Subject: consumers Data: the reports showed that a list of benefits of drinking tea Original collection purpose: general consumer and product information for the industry Action to be taken: the brand decides to emphasise these five benefits on its promotional materials 71 | P a g e

Chapter 6 Managing Customer Data 6.3. Customer Data Integration 6.3.1. Data Quality Problems of Existing Database Management Systems Existing database management systems being adopted by marketers failed to integrate well the data collected from various touchpoints and updated in a timely manner. Usually, these marketers may suffer the following symptoms in serving customers1: 1. Data latency When marketers have to process large volumes of data through traditional extraction, transformation, deduplication and distribution into meaningful customer information, it often takes time and then ages the data unnecessarily. This can seriously affect the effectiveness of CRM strategy and services to customers. 2. Lack of data and distribution standards Databases are usually developed in isolation. They capture and store data in different ways without linking customer information across sources. There are no standard means to integrate customer data at the point of contact. 3. Data inaccuracy Customers usually present themselves uniquely to companies. Traditional data-matching techniques are, therefore, not perfect and accurate enough for CRM applications to cure the real- time and enterprise-wide integration problem. It affects the accuracy of customer data across channels. Figure 6-6 Existing Database Management Problems Latency Existing Database manaement Problems Inaccuracy Standards 6.3.2. Requirements for Customer Data Integration In order to meet the customer expectation of his/her interaction with a business, marketers have to implement customer data integration (CDI) to enable relevant information to flow freely throughout an enterprise to the point of interaction1. CDI is a data management process where all prospect and customer data can be distributed to points of interaction in a timely and accurate manner1. There are seven unique requirements of data quality for CDI when considering the overall CRM objective1,3: 1. Distribution standards – standardised distribution reference has to be set and maintained throughout all interaction points. 2. Accessibility – data has to be accessed at all interaction points. 3. Timely – all customer data needed for decision making must be delivered within an appropriate time frame at the interaction points. 72 | P a g e

Chapter 6 Managing Customer Data 4. Accurate and unique – customer data delivered must consistently and accurately represent each unique customer entity, including individuals, households or businesses. 5. Complete – data must be collected from each interaction points to build up a complete record of each individual customer. 6. Practical value from the customer’s perspective – customers have to perceive the practical value and needs of the data to be collected as high. 7. Practical value from the company perspective – the commercial value of data is high from the company perspective. Figure 6-7 Seven Data Quality Requirements for CDI Distribution Accessibility Timely Accurate and unique standards Complete Practical value from Practical value from customer's perspective supplier's perspective 6.3.3. Steps of Customer Data Integration In the CDI process, collected and accumulated data could be transformed into knowledge through a series of functions and then used to create a consolidated view of customers. There are 12 steps to consolidate and transform customer data1: 1. Identify all possible interaction touchpoints with current and prospective customers. Examples include Web, hotline, kiosks, face-to-face, written documents, fax, shop, competition entry form, sweepstakes, etc. 2. Define how data will be collected from each interaction touchpoint. Methods include human-to- human interaction (e.g. retail sales counter, customer service representatives), human-to- technology interaction (e.g. kiosk, Web, mobile apps), or technology-to technology interaction (e.g. RFID, voice mail). 3. Establish business rules for data collection. In many cases, the same customer data may be captured from more than one touchpoint. Companies have to determine the types of data to be collected and the priority setting for each data variable among the touchpoints. 4. Create a methodology to manage the data input process after data collection. The data input process should be coordinated to meet the timing requirements of other processes, ensure security, and be consistent and accurate. 5. Place data into a common format. Adopt a standard format for data input across all touchpoints, including the number of characters and proper character types (e.g. alpha, numeric, special characters). 6. Separate customer linkage data from all other data. Data could be divided into two categories: (a) non-linkage data, which is any data variable not used to identify contact information, e.g. products purchased, the price paid, or date of purchase; (b) linkage data, which is any data variable used to identify a person, business or household. Examples could be membership number, credit card number, name, address, contact phone number, email address, etc. 73 | P a g e

Chapter 6 Managing Customer Data Figure 6-8 Steps of CDI Identify all Define how Establish Create Place data possible data will be business rules methodology into a to manage the touch points collected for data common collection data input format process Enhance Perform Correct the Standardised Separate customer customer linkage data cutomer customer data with linkage components linkage data other sourced identification linkage data from all other process data data Perform Consolidate Result: 360 suppression customer degree view of customer process linkage and or prospect related customer data 7. Standardise customer linkage data in terms of the number of characters and data types by using software to analyse each data element. 8. Correct the linkage data components. Use software to identify data errors and make corrections correspondingly. 9. Perform customer linkage identification process. This process links individual customer records that appear more than once in any set of data. It is referred to as “merge”. The purpose is to identify each appearance of an individual and to assign an identifier to each record occurrence. Usually, there are three types of record linkage methods: a. Manual record matching is the oldest, most time-consuming, and costliest method and is not a feasible option when large databases are involved. b. Deterministic record linkage links pairs or records on the basis of whether they match on certain variables, e.g. surname, address, birth date, gender or some combination thereof. c. Probabilistic record linkage uses probabilities to determine whether a pair of records refers to the same individual. 10. Enhance customer data with other sourced data. Add the matched secondary data to existing customers or prospects by using the software, which can enrich subsequent CRM initiatives. 11. Perform a suppression process on data. Suppress a person, who is not welcomed to the brand, in a database for not keeping any relationships by using some data enhancement and data suppression providers, e.g. Infogroup, Nielsen Claritas. Put them under “Do not Call/Mail” list. 12. Consolidate customer linkage and related customer data. Reunite linkage and non-linkage data by respective sequence numbers to generate a single consolidated view of individual customers. 74 | P a g e

Chapter 6 Managing Customer Data 6.4. Big Data and Data-Driven Marketing Era 6.4.1. Introduction to Big Data Big data refers to a large amount of structured and unstructured data, which is too complex to be captured, processed, stored, searched, and analysed by conventional database management systems. This highlights the characteristics of big data: volume, velocity, variety, veracity4, 5, 9. Figure 6-9 Characteristics of Big Data Volume Velocity Variety Veracity refers to the refers to the refers to refers to scale of data analysis of different types of accurateness and streaming data certainty of data Marketers can structured and easily find large It requires unstructured The quality of amount of data marketers having data is not exist in databases data the needs to consistently high and on web process, store, Examples include across various and analyse data text, audio, online platforms video, quickly clickstreams, and log files Big data exists beyond company web analytics or databases. It often exists outside of an organisation, and sources include (but not limited to) social sharing data owned by different social media enterprises, competitive pricing data from comparison shopping engines, and consumers’ mobile subscriptions6. It is expected that web traffic will be dominated by wireless devices, and the volume of digital content will be increased. Figure 6-10 Sources of Data Internal Web Data (Own Web Social Media Data Mobile Data Transaction/Sales/ Site and Pages) Product Databases Search Engine Data Telephone Traditional Etc. Communication Log Advertising and Communication Data and Details 75 | P a g e

Chapter 6 Managing Customer Data 6.4.2. Data-driven Marketing In the era of data-driven marketing, it is necessary to make use of big data to develop and manage customer relationships. Analytics (analysed data) are expected to drive business growth and bring organisations closer to customers8. Figure 6-11 Benefits and Strategies of Data-driven Marketing Driving Business Growth Closer to Customers optimising conversion rates tracking their behaviours across devices and channels acquiring new customers personalisation and targeting improving marketing ROI identifying valuable segments evaluating the overall customer experiences identifying patterns of content engagement and campaign response 6.5. Privacy and Ethical Dilemma Marketers are increasingly applying analytics to tailor user experience in CRM, but concerns about data ethics are popping up that force organisation to rethink the use of data. Dilemma #1: Should marketers use bundled or unbundled terms in collecting customer data? Bundled terms force consumers to give consent to all terms or else completely withdraw from future communication, but that brings more economic benefits to marketers3. Unbundled terms allow sufficient and meaningful choices for consumers to give consent in receiving future communication, but that brings less economic benefits to marketers. Dilemma #2: Should marketers collect some essential data for CRM or marketing if customers are not willing to provide but indeed provide upon request? Marketers usually prefer to collect more data from customers to ensure the success rate of a CRM campaign, but it may run the risk of alienating their most valuable assets - customers10. If marketers respect customers’ wishes, the CRM campaign may be less effective in inducing repeated purchases and keeping relationships. 76 | P a g e

Chapter 6 Managing Customer Data Dilemma #3: Should marketers use the collected data that consumers do not want to be used for CRM or marketing? Some consumers provided certain personal information for marketers, but they do not allow marketers to use some of their personal information for marketing or CRM11. If marketers ignore customers’ wishes and fully utilise the data, it may have greater success in serving customers. However, it may have to face unhappy customers if the customers found that their data was actually used. Dilemma #4: To what extent, how much customer data could be used by marketers for marketing and CRM? Some consumers feel that it is acceptable for a brand to use customer data analytics to predict churn/loyalty and develop customer profiles for marketing. However, using personally identifiable customer data, such as names, addresses, to change pricing offers or availability of services is a concern to consumers3. 6.6. Chapter Summary 1. Data could be classified as (a) categorical and metric data (nominal, ordinal, interval, and ratio data); (b) primary, secondary and derived data; (c) individual and household data. 2. Individual customer data of a household could be consolidated and categorised as household data. 3. Existing database management systems usually suffer data latency, data inaccuracy, and inconsistent data and distribution standards. 4. CDI has 12 steps to achieve a 360-degree view of customer or prospect. When doing CDI, it is necessary to maintain accurate, unique, timely, accessible and complete data. Also, data has to be distributed and collected via standardised reference. Both customers and suppliers have to find value in the data to be collected. 5. Big data has four major characteristics: volume, velocity, veracity, and variety. Big data and analytics help drive business growth and get closer to customers. 6.7. Key Terms Big data refers to a large amount of structured and unstructured data, which is too complex to be handled by conventional database management tools and has to be analysed quickly. Categorical data is also known as qualitative data. We cannot perform mathematics on this data. It could be further classified as nominal data and ordinal data. Customer data integration is a data management process where all prospect and customer data can be distributed to points of interaction in a timely and accurate manner. Derived data is created or inferred from other data. Household data is data attributed to individuals under the same household. Individual data is data attributed to a specific person. Metric data is known as qualitative data. It is measurable. It could be further classified as interval data and ratio data. Primary data is collected directly from the original source. Secondary data is collected from a party other than the party for which the data represents. 77 | P a g e

Chapter 6 Managing Customer Data 6.8. Concept Check Quiz 1. Compare the differences between nominal data and interval data. Also, give three examples of each kind of data. 2. Compare the differences between primary data, secondary data and derived data. Also, give two examples of each kind of data. 3. Use one example to illustrate the difference between individual data and household data. 4. Describe the three major symptoms of existing database management in serving customers. 5. Describe any five requirements for CDI about data quality. 6. Briefly describe the 12 steps of CDI in order to generate a 360-degree view of a customer. 7. Define big data and describe its major characteristics. 8. Describe the contribution of big data and analytics to the business. 6.9. Concept Challenge Quiz 1. Fujifilm wants to recruit its customers to be the members of “Instax”. It designs to collect all data in order to generate a complete customer profile in the membership form. Argue for or against this marketing decision. Hint: Answers should balance the costs and needs of collecting all possible customer data. Both sides could be discussed first and then conclude your argument for one side. 2. :CHOCOOLATE is one of the brand lines under I.T. You have proposed a competition for it to recruit more youngsters as its customers. Design the competition entry form and then use a table to list out the categories of data to be collected from the form. Hint: Answers should include personal information, contact information, permission (direct marketing) and other relevant information. Utilise a table to list out the categories of each collected data. 6.10. References 1. Baran, R. J. & Galka R. J. (2013). CRM: The Foundation of Contemporary Marketing Strategy. NY: Routledge. 2. Pombriant, D. (n.d.). CRM data types: understanding data diversity. TechTarget. Retrieved July 23, 2014, from http://searchcrm.techtarget.com/tip/CRM-data-types-Understanding-data-diversity. 3. Burns E. (2014 April). Data collection practices spark debate on big data ethics, privacy. TechTarget. Retrieved August 6, 2014, from http://searchbusinessanalytics.techtarget.com/feature/Data- collection-practices-spark-debate-on-big-data-ethics- privacy?src=5276305&asrc=EM_ERU_31832087&uid=14420055&utm_medium=EM&utm_source=ER U&utm_campaign=20140722_ERU+Transmission+for+07%2F22%2F2014+%28UserUniverse%3A+970 870%29_myka-reports%40techtarget.com 4. Asigra (n.d.). What is big data? [Infographic]. Retrieved July 21, 2015 from https://www.pinterest.com/pin/330099847662793518/ 5. Ward, W. J. (2014, October 27). What is big data and how can it help improve your daily life? [Infographic]. Retrieved July 21, 2015 from http://www.dr4ward.com/dr4ward/2014/10/what-is-big- data-and-how-can-it-help-improve-your-daily-life-bigdata-infographic.html 6. The ecommerce guide to big data (n.d.). GetElastic. Retrieved January 9, 2015 from, http://www.getelastic.com/the-ecommerce-guide-to-big-data-infographic/ 7. IBM (n.d.). 4 steps to big data success [Infographic]. Retrieved July 21, 2015 from https://s-media- cache-ak0.pinimg.com/736x/63/40/09/634009f541eee24371a6bf1c89d3c14d.jpg 78 | P a g e

Chapter 6 Managing Customer Data 8. Griffin T. (2014, July 30). The era of data-driven marketing [Infographic]. Retrieved from http://visual.ly/era-data-driven-marketing 9. IBM (n.d.) The four Vs of Big data. Retrieved July 28, 2016, from IBM Big Data Hub Website: http://www.ibmbigdatahub.com/infographic/four-vs-big-data 10. Kumar V. & Reinartz W. (2012). Customer relationship management: concept, strategy, and tools (2nd ed.). Belin: Springer. 11. Norberg, P. A., Horne, D. R. & Horne, D. A. (2007). The privacy paradox: personal information disclosure intentions versus behaviors. The Journal of Consumer Affairs, 41(1), 100-126. 79 | P a g e

Chapter 7 Data Privacy and Ethics Chapter 7 Data Privacy and Ethics 7.1. Chapter Objectives • Get familiar with the current privacy ordinance in Hong Kong. • Distinguish opt-in statement from the opt-out statement. • Identify five major elements of a privacy statement. 7.2. Privacy Concerns Managing big data and data privacy becomes a concern to every consumer. Privacy is an individual’s right to have his/her personally identifiable data protected, at home and work1. Personally identifiable data refers to the consumer data collected by a brand used to identify or contact an individual plus all of the additional facts that the brand stores in a database about that individual1. Privacy applies to all the data company collect (or have collected) about all customers and prospects, whether online or off. Marketers have the responsibility to carefully manage the privacy issue from both legalistic, ethical and customer experience perspectives1. Privacy becomes a hot topic, with new cases and the situation arising every day around the globe like the explosion in social media use. A study of the Wall Street Journal about smartphone applications found that2: 1. over half transmitted the phone’s unique ID to other companies, and nearly half transmitted the phone’s location (usually to advertising companies); 2. five per cent sent personal details to outsiders; 3. impossible to delete cookies; 4. users cannot opt out. 7.3. Current Privacy Ordinance in Hong Kong Direct marketing is a popular business practice. It usually involves the collection and use of personal data by a brand for direct marketing and CRM. In some cases, it also includes the provision of such data by that brand to another person or party for use in direct marketing. Under the above situation, compliance with the requirements of the Personal Data (Privacy) Ordinance (Cap 486, The Laws of Hong Kong) (the “Ordinance”) is essential to any direct marketing activities in Hong Kong3. About the Ordinance, marketers have to recognise the key terms3, 4 and the privacy management programme5. 7.3.1. Privacy Management Programme (PMP) According to Office of the Privacy Commissioner for Personal Data, Privacy Management Programme (PMP) is served as a strategic framework to assist organisations in building a robust privacy infrastructure with the support of effective ongoing review and monitoring process to facilitate compliance with the requirements under the Ordinance5. It is not a requirement under the Ordinance, but it can demonstrate the commitment of organisations to good corporate governance5. It can also build trust with employees and customers through open and transparent information policies and practices5. The HKSAR Government and 39 organisations from the insurance, telecommunications and other sectors have pledged to implement PMP on 18 February 2014. List of these organisations could be found on the following website: https://www.pcpd.org.hk/pmp/pledging.html. 80 | P a g e

Chapter 7 Data Privacy and Ethics 7.3.2. Key Terms used in the Ordinance According to Part 1 (Section 2) of the Ordinance, there are some interpretations of terms4: Consent Law Ethics Data Privacy Data means any representation of information (including an expression of opinion) in any document and includes a personal identifier. Data subject, in relation to personal data, means the individual who is the subject of the data. Data user, in relation to personal data, means a person who, either alone or jointly or in common with other persons, controls the collection, holding, processing or use of the data. Personal data means any data – (a) relating directly or indirectly to a living individual; (b) from which it is practicable for the identity of the individual to be directly or indirectly ascertained; and (c) in a form in which access to or processing of the data is practicable. Personal identifier means an identifier – (a) that is assigned to an individual by a data user for the purpose of the operations of the user; and (b) that uniquely identifies that individual in relation to the data user, but does not include an individual’s name used to identify that individual. Data user: ABC Staff Data Subject: Mary Personal data: all data provided by or related to Mary (name, age, membership number, and product preference) Personal identifier: membership number in this case 81 | P a g e

Chapter 7 Data Privacy and Ethics About the use of personal data in direct marketing and provision of personal data for use in direct marketing, there are some specific key terms (Part 6A, Division 1, Section 35A of the Ordinance)3, 4: Consent denotes a data subject’s agreement to the use of personal data in direct marketing or the provision of personal data for use in direct marketing. It includes an indication of no objection to the use or provision. “Consent\" cannot be inferred from data subject's non-response. Data subject concerned must have explicitly indicated that he/she did not object to the use and/or provision of his/her personal data to another for use in direct marketing.  Data subject replied “I am interested to know more about your promotion, please send me more the information to the address at XYZ.”  Data subject replied “I will think about your promotion”. Direct marketing refers to – (a) the offering, or advertising of the availability, of goods, facilities or services; or (b) the solicitation of donations or contributions for charitable, cultural, philanthropic, recreational, political or other purposes, through direct marketing means. \"Direct Marketing\" does not include unsolicited business electronic messages sent to telephones, fax machines, or email addresses without addressing to specific persons by name and person-to-person calls being made to phone numbers randomly generated.  A direct mail is sent to the address of an opted-in customer – Mary.  A marketing cold call is made to an unidentified owner of a particular telephone number. Direct marketing means is defined to mean – (a) sending information or goods, addressed to specific persons by name, by mail, fax, electronic mail or other means of communication; or (b) making telephone calls to specific persons. 82 | P a g e

Chapter 7 Data Privacy and Ethics Marketing subject is defined to mean – (c) any goods, facility or service offered, or the availability of which is advertised; or (d) any purpose for which donations or contributions are solicited. The description of the classes of marketing subjects should be specific, making reference to the distinctive features of the goods, facilities or services so that it is practicable for the customers to ascertain the goods, facilities or services to be marketed with a reasonable degree of certainty.  Discount offers in relation to carwash services provided by Dinosaur Company.  Promotional offers provided by Dragon Company. Permitted class of marketing subjects means a class of marketing subjects in relation to which a data subject has provided his/her consent to the data user for the use or provision to another person for the use of his/her personal data in direct marketing. Permitted class of persons means the class of persons in relation to whom a data subject has provided his/her consent to the data user to provide his/her personal data for use in direct marketing. Permitted kind of personal data means the specific type of personal data in relation to which a data subject has given his/her consent to the data user for use or provision to another person for use in direct marketing. Response channel: is the means of communication provided by a data user for a data subject to indicate his/her consent to the intended use or provision for use of his/her personal data. Examples include: • A telephone hotline* • A facsimile number • A designated email account • An online facility to allow data subject to subscribe or unsubscribe • A specific address to collect written response from the data subject. • A designed person to handle request from the data subject through the above or other means* * Where telephone communication is involved, it is advisable for data users to record the communication. Data users should also remind data subjects that the telephone communication between would be recorded before the recording. ** Where the consent to be sought from a data subject is for the provision of his/her to another person for use in direct marketing, a data user can only elect a response channel which enables the data subject’s consent to be made in writing. This arrangement is necessary for complying with Division 3 of Part VIA of the Ordinance which specifically requires that such consent has to be communicated in writing. 83 | P a g e

Chapter 7 Data Privacy and Ethics Valid Consent Figure 7-1 Game Corner Instruction: Use a tick to identify “Valid Consent” cases Cases 1. An oral reply from the data subject: “okay, please send me the promotional information to my email address at XXX.” 2. The data subject doesn’t have any response to a direct marketing solicitation by email. 3. The data subject returns a blank agreement to the data user - no indication about receiving direct marketing materials, no signature and not dated. 4. The data subject doesn’t indicate an objection to receiving direct marketing information in an agreement but signed and returned to the data user. Figure 7-2 Game Corner Direct Marketing Instruction: Use a tick to identify “Direct Marketing” cases Cases Cases 5. A service representative approaches its existing opted-in customers by telephone about the latest facial care services. Each customer is greeted as “Mr. XXX or Ms. YYY” at the beginning of the conversation. 6. A marketing SMS is sent from CarCar Company to its members about the upcoming promotional offer at Christmas. 7. A direct mail was sent to an address without stating the name of the occupant. 8. A marketing Whatsapp message was sent to a mobile phone number of an unidentified owner. 9. A customer service manager introduces financial products to a customer face- to-face at the branch. Figure 7-3 Game Corner Instruction: Use a tick to identify “Acceptable Descriptions of Marketing Subjects” cases Cases Acceptable Marketing Subjects 10. Promotional offers provided by CarCar Company 11. Promotional offers in relation to facial massage services offered by CarCar Company 12. Healthcare products and services offered by CarCar Company 13. All goods and services offered by CarCar Company 84 | P a g e

Chapter 7 Data Privacy and Ethics Figure 7-4 Game Corner Instruction: Find out the “Permitted Class of Marketing Subjects” Cases Permitted Class of Marketing Subjects 14. A data subject has given consent to allow a data user to use her personal data for direct marketing of (a) cosmetic products, (b) skincare services, and (c) nail care services, but no indication to receive (d) hair care services. 15. A data subject has refused to receive information about (a) fashion and accessories, but he/she has given consent to allow a data user to receive promotional information about (b) food and grocery, (c) baby products, and (d) home appliance products. Figure 7-5 Game Corner Instruction: Find out the “Permitted Class of Persons” Cases Permitted Class of Persons 16. A data subject has given consent to CarCar Company to provide her personal data to (a) healthcare services companies, but she refuses to provide her personal data to (b) financial services companies. 17. A data subject has given consent to CarCar Company to provide her personal data to (a) entertainment service companies, but she refuses to provide her personal data to (b) banking services companies. Figure 7-6 Game Corner Instruction: Find out the “Permitted Kind of Personal Data” Cases Permitted Kind of Personal Data 18. A data subject has given consent to use her (a) phone number and (b) email address to CarCar Company for direct marketing purpose. She agrees to provide her (c) age group information but refuses CarCar Company to use it for direct marketing purposes. 19. A data subject has given consent to use her (a) age group and (b) residential address to CarCar Company for direct marketing purpose. She agrees to provide her (c) contact information (including phone number and email address) but refuses CarCar Company to use it for direct marketing purposes. 85 | P a g e

Chapter 7 Data Privacy and Ethics 7.4. Obtaining Consent: Opt-in vs. Opt-out When asking for consent from consumers, brands could either use opt-in or opt-out statement. The conditions of these two policies are different, and the marketing actions to be taken are also varied. The following table summarised the above issues: Figure 7-7 Marketing Actions Regarding Opt-in and Opt-out Policies Opt-in Policy Opt-out Policy Conditions If a customer did not make choices (blank If a customer did not make choices (blank choice), the company must treat his choice), a company might treat his Marketing response as “no” (i.e. refuse or consent is response as “yes” (i.e. consent is given, Actions not given). okay to contact) Marketing actions should only include Marketing actions could only exclude those those who answered YES. who said NOT to contact. Sample of Opt-in Statement I want to receive promotional information from ABC Company.  Yes  No Jenny____________ Customer’s Signature Name: Jenny Date: 1 Sep 2019 Figure 7-8 Responses to Opt-in Statement Consent Refuse Implied as \"Refuse\" • YES = I want to... • NO = I don't want to... • Blank = Empty cell • Consent is given to the • Consent is not given • Implied that consent is provision and use of (or Refuse) to the not given to the personal data. provision and use of provision and use of personal data. personal data. • Direct marketing could be done. • Direct marketing could • Direct marketing could not be done. not be done. 86 | P a g e

Chapter 7 Data Privacy and Ethics Sample of Opt-out Statement I do not want to receive promotional information from ABC Company.  Yes  No Jenny____________ Customer’s Signature Name: Jenny Date: 1 Sep 2019 Figure 7-9 Responses to Opt-out Statement Refuse Consent Implied as \"Consent is given\" • YES = I don't want to... • NO = I want to... • Blank = Empty cell • Consent is not given • Consent is given to the • Implied that consent is (or Refuse) to the provision and use of given to the provision provision and use of personal data. and use of personal personal data. data. • Direct marketing could • Direct marketing could be done. • Direct marketing could not be done. be done. 7.4.1. Ethical Corner Which approach shall we use, opt-in or opt-out statement? Which one brings the greatest benefits to the marketers? Which one brings the greatest benefits to the consumers? Which one has a higher ethical standard? Also, is it good to bundle all the terms and requests together? Is it good for the company? Is it good for the consumers? Which one has a higher ethical standard? Figure 7-10 Ethical Issues about “Choices” Bundled Opt-in vs. vs. Unbundled Opt-out Ethics 87 | P a g e

Chapter 7 Data Privacy and Ethics Example 7-1 Bundled Opt-in Statement 1. We, ABC Company, intend to use your personal data for direct marketing. 2. We may not use your personal data unless we have received your consent. 3. Please check this box  to indicate your consent that we can use all of the following personal data for direct marketing: • Name • Residential address • Mobile phone number • Email address 4. Please check this box  to indicate your consent that we can use all of the following contact methods for direct marketing: • Email • Phone call • SMS • Mail 5. Please check this box  provided to indicate your consent that we can promote all of the following marketing subjects in direct marketing: • Facial care products • Healthcare services Please sign below to confirm that you have read and agreed to all the terms and conditions printed on the form, as well as your consent to the provision and use of personal data for direct marketing. ____________________ Customer’s Signature Name: Date: 88 | P a g e

Chapter 7 Data Privacy and Ethics Example 7-2 Unbundled Opt-in Statement (Paper Version)3 1. We, ABC Company, intend to use your personal data for direct marketing. 2. We may not use your personal data unless we have received your consent. 3. Please check the box provided to indicate your consent that we can use the personal data for direct marketing:  Name  Residential address  Mobile phone number  Email address 4. Please check the box provided to indicate your consent that we can use the contact methods for direct marketing:  Email  Phone call  SMS  Mail 5. Please check the box provided to indicate your consent that we can promote the marketing subjects in direct marketing:  Facial care products  Healthcare services Please sign below to confirm that you have read and agreed to all the terms and conditions printed on the form, as well as your consent to the provision and use of personal data for direct marketing. ____________________ Customer’s Signature Name: Date: 89 | P a g e

Chapter 7 Data Privacy and Ethics Example 7-3 Unbundled Opt-out Statement (Paper Version)3 1. We, ABC Company, intend to use your personal data for direct marketing. 2. We may not use your personal data unless we have received your consent. 3. Please cross the box provided to indicate your refusal that we use the personal data for direct marketing:  Name  Residential address  Mobile phone number  Email address 4. Please cross the box provided to indicate your refusal that we use the contact methods for direct marketing:  Email  Phone call  SMS  Mail 5. Please cross the box provided to indicate your refusal that we promote the marketing subjects in direct marketing:  Facial care products  Healthcare services Please sign below to confirm that you have read and agreed to all the terms and conditions printed on the form, as well as your decision to the provision and use of personal data for direct marketing. __________________ Customer’s Signature Name: Date: 90 | P a g e

Chapter 7 Data Privacy and Ethics Example 7-4 Unbundled Opt-in Statement (Online Version)3 1. We, ABC Company, intend to use your personal data for direct marketing. 2. We may not use your personal data unless we have received your consent. 3. Please check the box provided to indicate your consent that we can use the personal data for direct marketing:  Name  Residential address  Mobile phone number  Email address 4. Please check the box provided to indicate your consent that we can use the contact methods for direct marketing:  Email  Phone call  SMS  Mail 5. Please check the box provided to indicate your consent that we can promote the marketing subjects in direct marketing:  Facial care products  Healthcare services Please press the “SUBMIT“ button below to confirm that you have read and agreed to all the terms and conditions on the form, as well as your consent to the provision and use of personal data for direct marketing. Remarks for the confirmation of consent: The “Name” shall be recorded by the (membership/contest) form in the previous page, and the “date and time” will be recorded by the system automatically. About “signature”, it is replaced by the “submit” button. 91 | P a g e

Chapter 7 Data Privacy and Ethics 7.5. Five Elements of Privacy Statement When a brand drafts a statement about consumer privacy, five principles have to be considered: Notice, Choice, Access and Accuracy, Security, and Oversight1. Figure 7-11 Five Elements of Privacy Statement Notice Choice Access and Security Oversight Accuracy 7.5.1. Notice Rule #1: Keep the policy simple and accurate about what data the brands collect, where they get it, why they need it, how they use it, and whom they let see it. Rule #2: Create a very short statement that briefly summarises the company’s privacy policies. The statement has to be placed in the touchpoints where the company collects customer information. Rule #3: Make sure business partners (with whom the brands must share customer information in order to do business) have a privacy policy that is at least as stringent as the brand. The brand should include this requirement in the business contract in order to enhance the total customer experience. Rule #4: Educate customers about what they should expect regarding the privacy of their personally identifiable information by using a common language. Do not use confusing language that no one understands. Rule #1 Simple and Rule #2 Short and Rule #3 Align with Rule #4 Educate Accurate Distributed Business Partners Customers 7.5.2. Choice Rule #1: Allow customers to give consent or refuse (through opt-in or opt-out choice) to the provision and use of personal data in the ways an organisation has described in the opt-in or opt-out statement. Avoid inferring customers’ choices. Rule #2: Allow customers to complete the transaction no matter what they choose (agree or refuse giving permission). Honour the customers’ decision over time and across the organisation. Such integrity can increase customers’ trust towards the brand and may induce them to give more personal information and keep the relationship. Rule #3: Ask for permission again upon any changes made in the privacy statement. Changes made, updated permission, and the permission date should be kept and stored in a database. Rule #4: Allow customers to change their choices anytime and in all possible means. Rule #1 Give Rule #2 Allow to Rule #3 Update Rule #4 Allow to customer choices Complete Permission Change Choices Transaction 92 | P a g e

Chapter 7 Data Privacy and Ethics 7.5.3. Access and Accuracy Rule #1: Allow customers to access and review their own data, both online and offline. Rule #2: Allow customers to correct their own data through either online or offline means in order to maintain the profile accurate and up-to-date at the least cost. Rule #3: Place customers in the best position to keep profiles accurate and up to date. Those who update their profile and data periodically are investing their time in the relationships. Rule #1 Allow Access Rule #2 Allow Rule #3 Place and Review Correction Customers in the Best Position 7.5.4. Security Rule #1: Data in all databases is protected with a combination of a firewall, encryption and/or passwords over the Internet. Rule #2: Having a statement clearly stated the customer information is safe from anyone with whom the company has not planned to share it. Rule #1 Protected Rule #2 Stated Clearly 7.5.5. Oversight Rule #1: Give customers the option to contact an independent party if they feel their privacy rights have been abused. Rule #2: Use well-known independent parties, e.g. BBBOnline Privacy Seal, TRUSTe, WebTrust. Rule #1 Option to Rule #2 Use Well- Contact Independent known Parties Parties 7.5.6. Examples of Quality (Online) Privacy Statements It is difficult to find quality privacy statements covering the five stated elements. Some of them like Amazon.com and Visa have drafted easily understandable statement around most elements. However, the “oversight” element was not covered1. Companies like Intel, Kodak and HP have created fairly simple and understandable online privacy statements that cover the five elements. All carry a privacy seal. Also, all statements could be reached through a direct link on the home page1. 93 | P a g e

Chapter 7 Data Privacy and Ethics 7.6. Chapter Summary 1. Privacy is an individual’s right to have his/her personally identifiable data protected, at home and work. 2. Personally identifiable data refers to the consumer data that help organisations identify or contact an individual plus all of the additional facts that the brand stores in databases about that individual. 3. A marketing “cold call” to an unidentified owner of a particular phone number is not regarded as direct marketing under Cap 486 the Personal Data (Privacy) Ordinance. 4. There is a difference between opt-in and opt-out statement. Organisations should treat consumer decision as different. 5. There are five principles to draft privacy statement, including notice, choice, access and accuracy, security, and oversight. 7.7. Key Terms Consent is defined as an indication of no objection to the use and provision of personal data for direct marketing3. Direct marketing is the offering, or advertising of the availability, of goods, facilities or services; or the solicitation of donations or contributions for charitable, cultural, philanthropic, recreational, political, or other purposes3. Direct marketing means is defined as sending information or goods, addressed to a specific person by name, by mail, fax, electronic mail or other means of communication; or making telephone calls to specific person3. Marketing subject refers to any goods, facility or service offered, or the availability of which is advertised; or any purpose for which donations or contributions are solicited3. Permitted class of marketing subjects means a class of marketing subjects in relation to which a data subject has provided his/her consent to the data user for the use or provision to another person for the use of his /her personal data in direct marketing3. Permitted class of persons means the class of persons in relation to whom a data subject has provided his/her consent to the data user to provide his/her personal data for use in direct marketing3. Permitted kind of personal data means the specific type of personal data (e.g. address, telephone number) in relation to which a data subject has given his/her consent to the data user for use or provision to another person for use in direct marketing3. Personally identifiable data refers to consumer data that help organisations identify or contact an individual plus all of the additional facts that brand stores about that individual1. Privacy is an individual’s right to have his/her personally identifiable data protected, at home and at work1. Privacy management programme is served as a strategic framework to assist organisations in building a robust privacy infrastructure with the support of effective ongoing review and monitoring process to facilitate compliance with the requirements under the Personal Data (Privacy) Ordinance5. Response channel is the means of communication provided by a data user for a data subject to indicate his/her consent to the intended use or the provision for use of his/her personal data3. 94 | P a g e